Incitec Pivot Ltd. (IPL) Chairman Greg Robinson has cited “complications” in negotiations for the proposed A$1.5 billion sale of the company’s fertilizer business, Incitec Pivot Fertilisers (IPF), to Indonesia’s state-owned fertilizer producer Pupuk Kaltim, according to the Australian Financial Times, saying IPL may opt to “walk away” from the deal.
IPL has been in negotiations with Pupuk Kaltim since last summer (GM Aug. 11, p. 1; July 28, p. 1) and shedding the fertilizer unit has been under consideration for some time (GM Sept. 6, 2019).
“The negotiation, like all commercial negotiations is, it’s mature, it’s got complications, and our objective is, in the very near term, to complete or walk away from that,” the Australian Financial Times quoted Robinson telling shareholders at the company’s annual meeting on Dec. 20.
Regardless, he said it is IPL’s plan to focus on its explosives business, Dyno Nobel, and eventually exit fertilizer. He said a planned share buyback program will not occur until IPF is sold.
Analysts have suggested several possible sticking points to the sale of IPF (GM Aug. 11, p. 1), including availability and supply of natural gas and sulfur for the company’s Phosphate Hill ammonium phosphate plant; gaining approval from Australia’s Foreign Investment Review Board for the sale of Australia’s only phosphate producer; and farmer fears that the Australian phosphates might go to Indonesia instead of Australia.